Investment ideas are not available for free. They have to be found, or more appropriately identified. The question is: how does one find the right investment idea? Is it available in books? Can it be found on the stock pages of a newspaper? Or are stock market magazines a better source of ideas? Finally, what about the financial consultants? Can they provide useful ideas?
The best person to find an investment idea is you. Don’t be surprised. All that you need to do is to look for it. The investment idea is available in supermarkets, roadside hoardings, newspaper pages, television ads, gasoline stations. The only downside is that it is not labeled as an investment idea.
The question is how to locate it. The answer is not very difficult. If you see a new product in your local supermarket, and notice that it is being bought, stop to check the label. Find out the name of the company that has made it. Call the company’s office to learn if the product is listed, and if it is obtain the company’s balance sheet. See what are the company’s debts, cash flow and profit margins, and take a decision.
Your wife’s or child’s shopping bag is another source of an investment idea. It tells you what youngsters or women are buying month after month. Clearly, the companies that are making the products must have some intrinsic worth – that is why their products are selling.
You can do the same thing by going through the Standard and Poors Large Cap, Mid Cap, and Small Cap Guides. These guides provide the business summary of almost 1,500 companies. They also list contact information (including phone numbers and web addresses) and dividend records. Of course, it will be painful examining each and every bit of information. But the chances are that you may find companies whose share value is much lower than their fundamental strength.
The Value Line Investment Survey is another useful source. It lists historical figures on hundreds of companies. This information is also available online, and can be searched after paying a subscription fee.
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